UAE Real Estate Enters Balanced Phase Amidst Moderating Rents and Strong Demand for Off-Plan Projects

The UAE real estate market is entering a more balanced phase after a period of significant growth, according to a recent report by Colliers International. This transition is marked by moderating rental increases in key emirates, alongside sustained strong demand in specific sectors such as prime office spaces and off-plan residential developments.

Dubai Market Overview

Dubai's real estate sector saw the delivery of approximately 11,650 residential units in Q2 2026, comprising 9,200 apartments and 2,450 villas. An additional 56,600 residential units are projected for completion by year-end 2026. Rental growth has begun to moderate, with average apartment rents declining by 4% and villa rents by 2% on a quarterly basis. The sales market, however, continues its strong performance, particularly driven by high demand for first-class off-plan projects, which has supported price growth in various sub-markets. The launch of the "Affordable Leasing" initiative by the Dubai Land Department was also noted.

Abu Dhabi Trends

Abu Dhabi's real estate market exhibited moderate performance in Q2 2026, delivering about 2,200 residential units, with approximately 3,200 additional units expected by the end of the year. The rental market stabilised, with apartment rents seeing a 2% quarterly decrease and villa rents a 3% decrease. Annually, however, rents remained positive, with apartment rents up 7% and villa rents up 5% compared to Q2 2025. The sales market also entered a more balanced phase, with average apartment selling prices down 3% and villa prices down 1% quarterly. Despite this, annual price growth remained strong, with apartment prices up 19% and villa prices up 10%. Residential transaction volumes reached about 7,200, an 8% quarterly decrease but an 83% annual increase.

Northern Emirates and Al Ain

Sharjah saw an acceleration in new project announcements, with approximately 4,600 residential units launched in Q2 2026. Across the Northern Emirates, about 7,450 units are expected to be delivered in 2026, with Sharjah accounting for 5,450 units, Ras Al Khaimah for 1,400 units, and Ajman for 600 units. Average apartment rents in the Northern Emirates decreased by roughly 2%, with Sharjah experiencing a 4% decline. Ajman, Fujairah, and Umm Al Quwain demonstrated resilience due to affordability. In the sales market, average apartment prices in Sharjah and Ras Al Khaimah decreased by 3% and 2% quarterly, respectively. Al Ain's market remained stable, with residential, office, and retail rental rates largely unchanged quarterly, but showing positive annual growth: apartment rents up 7%, villa rents up 4%, office rents up 3%, and retail rents up 5% annually.